Question 1

Which of the following best describes the Law of Supply?

Accepted Answer

When the price of a good rises, the quantity supplied of that good rises.

Question 2

Suppose the price of wheat increases from $$2 to 4 $$per bushel. According to the Law of Supply, what is the most likely response from wheat suppliers?

Accepted Answer

They will increase the quantity of wheat supplied.

Question 3

Given the following supply schedule for wheat:

$$\begin{align*}
	ext{Price ( 24)} & 	ext{Quantity} \
1 & 20,000 \
2 & 30,000 \
3 & 40,000 \
4 & 60,000 
\end{align*}$$

What is the slope of the supply curve between the price points $$2$$ and $$3$$?

Accepted Answer

$$\frac{40,000 - 30,000}{3 - 2} = 10,000$$

Question 4

Which of the following statements about the supply curve is correct?

Accepted Answer

It shows the relationship between the price of a good and the quantity supplied.

Question 5

If the supply schedule for wheat is linear, what would be the equation of the supply curve using the points $$(1, 20,000)$$ and $$(4, 60,000)$$, where price is $$P$$ and quantity is $$Q$$?

Accepted Answer

$$Q = 13,333.33P + 6,666.67$$

Question 6

A supply schedule lists:

Accepted Answer

Pairs of prices and quantities supplied.

Question 7

If the price of wheat falls from $$3 to 1 $$per bushel, what happens to the quantity supplied according to the supply schedule provided?

Accepted Answer

It decreases from 40,000 to 20,000.

Question 8

Which of the following is NOT a characteristic of a supply curve in a perfectly competitive market?

Accepted Answer

It is downward sloping.

Question 9

If a new technology reduces the cost of producing wheat, what is the likely effect on the supply curve?

Accepted Answer

The supply curve will shift to the right.

Question 10

Suppose the market for wheat is perfectly competitive. If the price is set above the equilibrium price, what will happen in the market?

Accepted Answer

There will be a surplus of wheat.

Question 11

Which of the following best defines 'quantity supplied'?

Accepted Answer

The amount of a good that sellers are willing to produce at a specific price.

Question 12

If the supply curve for wheat is given by $$Q = 10,000P + 10,000$$, what is the quantity supplied when the price is $$P = 3$$?

Accepted Answer

$$Q = 40,000$$

Question 13

Which of the following would cause a movement along the supply curve for wheat?

Accepted Answer

A change in the price of wheat.

Question 14

If the supply schedule for wheat is as follows:

$$\begin{align*}
	ext{Price ( 24)} & 	ext{Quantity} \
1 & 20,000 \
2 & 30,000 \
3 & 40,000 \
4 & 60,000 
\end{align*}$$

What is the percentage increase in quantity supplied when the price rises from $$2 to$$ $$4$$?

Accepted Answer

$$\frac{60,000 - 30,000}{30,000} 	imes 100\% = 100\%$$

Question 15

Which of the following best explains why the supply curve is typically upward sloping?

Accepted Answer

Higher prices provide an incentive for producers to supply more of the good.

The Basics of Supply in Microeconomics

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